What's going on?

Don�t be fooled by Burberry�s sultry pout: the British fashion house is feeling so optimistic about the luxury industry that it lifted its sales forecast for the quarter on Friday.

What does this mean?

It�s famously counterintuitive to get all dressed up with nowhere to go, and there really has been nowhere to go. So it stands to reason that the pandemic has taken its toll on luxury retailers like Burberry. Lucky for them, the world�s fatcats � particularly those in China and South Korea � are starting to splash out again, which might be why Burberry�s expecting sales to be up by nearly a third this quarter compared to the same time last year. That�s both a big rebound from last quarter�s 9% drop and more than analysts were predicting, and that suited investors just fine: they sent Burberry�s stock up 8% � back to pre-pandemic levels.

Why should I care?

For markets: Luxury retail really does look like it�s bouncing back.�

Burberry can�t take all the credit for that positive investor reaction: other luxury brands � like Prada, Salvatore Ferragamo, and Ray-Ban maker EssilorLuxottica � brought their own promising news for the sector last week. They said their sales were all boosted by strong demand from Asian customers last quarter too, doubling down on Burberry�s evidence that luxury retail might finally have turned a corner.

The bigger picture: Luxury�s all about ecommerce and big-name brands.

Analysts at GAM Investments have pointed out that the pandemic’s accelerated two previously underlying trends in the luxury industry. First, the rise of ecommerce: the sector saw a decade�s worth of growth in the sector in just three months, with online sales doubling from before the outbreak. And second, the power of brand: big names like Louis Vuitton, Dior and Chanel have been winning market share off lesser-known rivals, and they might not give it up any time soon.